Rick Wilking/Reuters
- Warren Buffett's Berkshire Hathaway spent over $1.3 billion on stock buybacks in April.
- Berkshire has spent about $8 billion repurchasing shares this year.
- Buffett's partner, Charlie Munger, defended sensible buybacks as a "highly moral act."
- See more stories on Insider's business page.
Warren Buffett's Berkshire Hathaway spent $1.3 billion repurchasing its stock in the first three weeks of April, boosting its year-to-date buybacks to roughly $8 billion.
Berkshire's first-quarter earnings showed a decline in its outstanding shares between March 31 and April 22, suggesting it repurchased 439 "A" shares and 4.3 million "B" shares. Buffett's company likely spent just over $1.3 billion on them, based on the average prices of its two share classes during that period.
Berkshire plowed a record $25 billion into buybacks last year, including about $9 billion in both the third and fourth quarters. It slowed its purchases to $6.6 billion in the first quarter of this year, and its April spending suggests that trend is set to continue.
"Buybacks continued into the second quarter, but at a more modest pace," James Shanahan, an Edward Jones analyst who covers Berkshire, told Insider.
"Berkshire shares have appreciated sharply year-to-date, and it is possible that Mr. Buffett and Mr. Munger may now find the buyback to be less attractive today," he added.
Indeed, Berkshire's "A" and "B" shares have surged by almost a quarter to record highs this year, outstripping the benchmark S&P 500 index's 13% gain over the same period. Buffett may be looking harder for other things to buy, as he has repeatedly emphasized companies should only repurchase their shares if they're trading at a material discount to their intrinsic value.
Buffett's right-hand man and Berkshire's vice-chairman, Charlie Munger, echoed that sentiment at Berkshire's annual meeting this year. He said it was "deeply immoral" for executives to repurchase shares just to drive their stock prices higher, but defended buybacks as a "highly moral act" if they're done in the interest of shareholders.
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